Transcript Document

U.S. & Western NY
Economic Outlook
Commercial Planning & Analysis Department
May 12, 2010
Seasonally Adjusted at Annual Rate
U.S. Real Gross Domestic Product
Trillions
of Constant
Q1:10 Dollars
The Big Picture:
Linked Qtr Annualized
Percent Change
2009 Q1
Q2
$14.8
-6.4%
-0.7%
Q4
2.2%
5.6%
2010 Q1
3.2%
Q3
$14.7
$14.8
1.2% below
the 2008 peak
$14.6
Q1 Growth Drivers
$14.5
Stronger consumer spending
+2.6 pts
$14.4
Change in private inventories
+1.6 pts
$14.3
$14.3
$14.2
The recession’s over,
but output remains
$14.6
Stronger investment in
equipment & software
+0.8 pts
Stronger exports (gross)
+0.7 pts
$14.1
Sources: U.S. Bureau of Economic Analysis
$14.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2006
2007
2008
2009
‘10
Inflation-Adjusted Year-Over-Year Percentage Change
U.S. Personal Consumption Expenditure Growth
6%
5%
4%
3%
R
E
C
E
S
S
I
O
N
2.9% average
since Jan 1990
2%
1%
Consumers Are Peeking
Out of the Foxhole…
R
E
C
E
S
S
I
O
N
Real spending in March grew at
fastest rate since Aug. 2007
R
E
C
E
S
S
I
O
N
2.4%
0%
-1%
-2%
Source: U.S. Bureau of Economic Analysis
-3%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Mar
Seasonally Adjusted
U.S. Industrial Production - Manufacturing
Y-o-Y Chg
in Industrial
Production
Industrial Production (R)
Capacity Utilization (L)
Year-over-Year % Change
Capacity
Utilization
6%
80%
4%
78%
2%
76%
0%
-2%
Production
74%
-4%
72%
-6%
-8%
-10%
-12%
-14%
-16%
…While Manufacturers
Are Easing Off The Brakes
70%
68%
As demand improves, factories
are ramping up production
66%
Source: Federal Reserve
64%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Seasonally Adjusted
U.S. Unemployment Rate
But not enough to keep the
jobless rate from remaining near a
11%
10%
9%
8%
7%
R
E
C
E
S
S
I
O
N
26-year high…
June ’92
7.8%
5.7% average
since Jan 1990
R
E
C
E
S
S
I
O
N
R
E
C
E
S
S
I
O
N
9.9%
June ’03
6.3%
6%
5%
4.4%
Mar ‘07
4%
Source: U.S. Bureau of Labor Statistics
3%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Apr
How’s Western NY
performing in this
environment?
Relative Change in
Private Sector Employment Since January 2002
Western New York vs. United States
106%
Less Boom, Less Bust…
Net Change From Employment Peak
104%
United States
Western NY
-7.1 points
-3.6 points
102%
Mar ’08
104.5%
United
States
100%
Oct ’08
98.9%
98%
96%
94%
Western Portion of Upstate NY
(counties west of Utica-Rome metro area)
Source: U.S. Bureau of Labor Statistics
Based on 12-month moving average employment
97.4%
95.3%
2002 2003 2004 2005 2006 2007 2008 2009 ‘10
Mar
Seasonally Adjusted
Unemployment Rate
Western Portion of Upstate NY vs. U.S.
11%
10%
9%
The regional jobless rate
remains nearly two percentage
points below the U.S. average
United
States
8%
7%
6%
5%
9.9%
7.8%
(Mar)
Western
Portion of
Upstate
NY
4%
Sources: U.S. Bureau of Labor Statistics,
New York State Department of Labor
NYS data seasonally adjusted by M&T
3%
J FM AM J J A S ON D J FM A M J J A S ON D J FM AM J J A S ON D J FM A
2007
2008
2009
‘10
Year-Over-Year Percentage Change
Private Sector Employment Growth
Western Portion of Upstate NY vs. U.S.
WNY job losses are easing and
remain below the U.S. average
2%
1%
0%
Western
Portion of
Upstate
NY
-1%
-2%
-1.3%
-2.0%
-3%
United States
-4%
-5%
Source: U.S. Bureau of Labor Statistics
-6%
2007
2008
2009
‘10
Mar
Year-Over-Year Percentage Change in Private Sector Employment
U.S. States – First Quarter 2009 vs. 2010
Top 10 States
Bottom 10 States
1
Alaska
0.7%
41
Illinois
-3.8%
2
North Dakota
-0.2%
42
Georgia
-3.9%
3
New Hampshire -1.0%
43
Wisconsin
-4.1%
4
Vermont
-1.5%
44
Oklahoma
-4.2%
Western Upstate NY
-1.7%
45
Arizona
-4.2%
New York
-1.9%
46
Kansas
-4.2%
Downstate NY
-1.9%
47
California
-4.3%
6
Iowa
-2.1%
48
Colorado
-4.7%
7
Louisiana
49
Nevada
-5.3%
8
Virginia
-2.2%
-2.3%
50
Wyoming
-6.0%
5
Source: U.S. Bureau of Labor Statistics
Year-Over-Year Percentage Change in Private Sector Employment
NYS Metro Areas – First Quarter 2009 vs. 2010
-0.3%
Utica-Rome
-1.5%
Buffalo
Syracuse
-1.7%
Albany
-1.9%
Poughkeepsie / Newburgh
-1.9%
New York City
-1.9%
Rochester
United States
Binghamton
-2.3%
-2.8%
-3.4%
Source: U.S. Bureau of Labor Statistics
Buffalo Area
Trends
Year-Over-Year Percentage Change
Private Sector Employment Growth
Buffalo Metro Area vs. United States
Job losses are easing and
remain below the U.S. average
2%
1%
0%
Buffalo
-1%
-1.1%
-2.0%
-2%
-3%
United States
-4%
-5%
Source: U.S. Bureau of Labor Statistics
-6%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Seasonally Adjusted
U.S. and Buffalo Area Unemployment Rate
10%
9%
8%
United
States
Like most upstate NY
metros, Buffalo’s jobless
rate remains below the
U.S. average—and seems
to be diverging from
the national trend
9.9%
8.0%
(Mar)
7%
Buffalo
6%
5%
Sources: U.S. Bureau of Labor Statistics,
New York State Department of Labor
Note: Buffalo data seasonally adjusted by M&T
4%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A
2007
2008
2009
‘10
Year-Over-Year Percentage Change
Existing Home Price Appreciation
Buffalo-Niagara Falls Metro Area vs. United States
United States
14%
Why is Buffalo Doing So Well?
Local price appreciation has topped
the U.S. norm since 2007—helping
to insulate WNY from major swings
in consumer spending
12%
10%
8%
6%
6th highest appreciation out of 299
Metro Areas measured in Q4 2009
4%
Buffalo
2%
1.8%
0%
-2%
Note: Excludes homes financed with non-conforming loans
(subprime, I.O., jumbos, etc.); Includes refis
-4%
-6%
-4.7%
Source: Office of Federal Housing Enterprise Oversight
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2003
2004
2005
2006
2007
2008
2009
Single Family Home Building
Permits Per 100,000 Residents
Buffalo vs. 100 Largest U.S. Metro Areas
100 Largest U.S. Metro Areas
Less Boom, Less Bust
713
682
Buffalo-NF
WNY home builders avoided
speculative over building, preventing
a housing bubble from forming
552
371
* Based on 2008 population
Source: U.S. Census Bureau
209
130
2004
113
2005
93
2006
90
2007
119
65
2008
64
2009
Year-Over-Year Percentage Change
Construction Employment
Buffalo Metro Area vs. United States
Net Result:
8%
Construction job losses
are less of a drag on
the Buffalo economy
6%
4%
2%
0%
-0.6%
Buffalo
-2%
-4%
-6%
-8%
-10%
United States
-12%
-11.3%
-14%
-16% Sources: U.S. Bureau of Labor Statistics,
-18%
New York State Department of Labor
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Year-Over-Year Percentage Change
Retail Trade Employment
Buffalo Metro Area vs. United States
Another Positive
4%
As consumer spending stabilizes,
retail hiring starts to rebound
3.6%
Buffalo
-1.2%
2%
0%
-2%
-4%
-6%
United States
Sources: U.S. Bureau of Labor Statistics,
New York State Department of Labor
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Stronger Canadian Dollar Lends a Hand…
Change in
Automobile
Crossings
Year-Over-Year Percent Change in
Automobile Traffic Into U.S. via Four
Buffalo Area Bridges (Left Scale – RED)
10%
Can. Dollar
Exchange
Rate In USD
Canadian
Dollar is at
Par with U.S.
$1.00
Exchange Value of Canadian Dollar
Per U.S. Dollar (Right Scale – BLUE)
5%
$0.95
0%
$0.90
-5%
$0.85
-10%
$0.80
-15%
Sources: Federal Reserve, Niagara Falls and Peace Bridge Commissions
-20%
$0.75
J
F
M
A
M
J
J
2009
A
S
O
N
D
J
F
M
2010
A
Consumer Confidence
Buffalo Metro Area vs. United States
Index: 1996 Q1 = 100
100
A Long, Slow Climb Ahead
95
Confidence is slowly improving,
but remains well below
pre-recession levels
90
85
80
75
70
65
Buffalo
60
55
50
73.9
United
States
60.2
Sources: Siena Research Institute,
University of Michigan
Q1
Q2
Q3
2007
Q4
Q1
Q2
Q3
2008
Q4
Q1
Q2
Q3
2009
Q4
Q1
‘10
Rochester Area
Trends
Year-Over-Year Percentage Change
Private Sector Employment Growth
Rochester Metro Area vs. United States
Job losses are easing and
remain below the U.S. average
2%
1%
0%
Rochester -1.8%
-1%
-2%
-2.0%
-3%
United States
-4%
-5%
Source: U.S. Bureau of Labor Statistics
-6%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Share of Total Private Sector Employee Compensation*
Health Care & Education Payroll Income
Rochester Metro Area vs. United States
23%
22%
21%
20%
A Nice Shock Absorber…
23.0%
Health care & education are
a major source of stability
for the Rochester economy
19%
18%
17%
16%
Rochester
1,800 net new jobs created
over the past 12 months (+1.8%)
15.9%
15%
14%
13%
United States
12%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2002 2003 2004 2005 2006 2007 2008 ‘09
Sources: U.S. Bureau of Labor Statistics
* 4-Quarter running total
Share of Total Private Sector Employee Compensation*
Manufacturing Payroll Income
Rochester Metro Area vs. United States
32%
…To Help Offset Factory Layoffs
30%
Industrial payrolls continue to shrink,
but remain a major income source
28%
26%
24%
Rochester
22%
6,100 net jobs lost
over the past 12 months (-9.3%)
20%
22.3%
18%
16%
14%
13.6%
United States
12%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2002 2003 2004 2005 2006 2007 2008 ‘09
Sources: U.S. Bureau of Labor Statistics
* 4-Quarter running total
Year-Over-Year Absolute Change
Rochester Area Job Gain/Loss – Q1 2010
Percentage
Change
Health Care Services
Private Education
Financial Activities
1,200
Manufacturing layoffs
account for 71% of
2010 job losses, even
though they make up
just 12% of total
employment
800
-33
1.6%
2.1%
-0.2%
Construction
-300
-2.0%
Retail (Ex. Food Stores)
-400
-1.1%
Wholesale Trade
-867
-4.8%
Leisure & Hospitality
-900
-2.4%
Professional &
Business Services
Manufacturing
-1,900
-6,100
-3.2%
-9.3%
Source: U.S. Bureau of Labor Statistics
Total Private Sector Payroll Income
Rochester Metropolitan Area
Manufacturing vs. Education & Health Care
Billions
$4.6
$4.4
$4.2
$4.0
$3.8
$3.6
$3.8
$3.7
Manufacturing
$3.4
$3.2
Health Care
& Education
$3.0
$2.8
$2.6
$2.4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2002 2003 2004 2005 2006 2007 2008 ‘09
Sources: U.S. Bureau of Labor Statistics
* 4-Quarter running total
Federal Reserve Bank of New York
NYS Manufacturing Activity Index
Index Numbers Above 0 = Expansion
35
30
25
20
15
10
5
2009 Oct
Nov
Dec
2010 Jan
Feb
Mar
Apr
Increase
51.1%
41.3%
24.5%
33.1%
41.6%
43.3%
47.5%
Decrease
17.6%
19.0%
20.0%
17.2%
16.7%
20.4%
15.6%
NET
+33.4
+22.3
+4.5
+15.9
+24.9
+22.9
+31.9
31.9
0
-5
Positive Outlook
-10
-15
-20
NYS manufacturing activity
-25
is rising once again
(most of which is Upstate)
-30
-35
J F M A M J J A S O N D J F M A M J J A S O N D J F M A
2008
2009
2010
Manufacturing Share of
Gross Metropolitan Product - 2008
Upstate NY Metro Areas vs. United States
23.2%
ROCHESTER
17.4%
Buffalo
15.7%
Binghamton
Syracuse
U.S. Metro
Area Average
12.4%
10.9%
Industrial Impact
Stronger factory output
should provide a key
boost to the Upstate NY
economy during the
second half of 2010
Inflation Adjusted 12-Month Running Total
Constant
March 2010
Dollars
(millions)
County Sales Tax Collections in the
Rochester Metropolitan Area
The New Normal?
With less consumer
spending, real sales
tax receipts have
shifted downward by
8.5% since mid-2008
$570
$560
$550
But are up 0.8% since
November 2009
$540
Monroe, Livingston, Ontario, Orleans & Wayne counties
$530
$520
Note: data are cash sales tax collections (excluding EFTs)
for county governments only—excluding cities
and school districts
$525
Sources: NYS Department of Taxation & Finance,
U.S. Bureau of Economic Analysis
$510
J F M AM J J A S O N D J F M AM J J A S O N D J F M AM J J A S O N D J F M
2007
2008
2009
‘10
Year-Over-Year Percentage Change
Consumer Confidence
Rochester Metro Area vs. United States
Positive Outlook
30%
26.8%
Confidence is starting to
improve, easing downward
pressure on household spending
20%
14.5%
10%
0%
Rochester
-10%
United States
-20%
-30%
-40%
Sources: Siena Research Institute, University of Michigan
Q1
Q2
Q3
2007
Q4
Q1
Q2
Q3
2008
Q4
Q1
Q2
Q3
2009
Q4
Q1
‘10
Syracuse Area
Trends
Year-Over-Year Percentage Change
Private Sector Employment Growth
Syracuse Metro Area vs. United States
A Recurring Pattern
2%
Job losses have been less
severe than the national norm
1%
0%
Syracuse
-1%
-1.2%
-2.0%
-2%
-3%
United States
-4%
-5%
Source: U.S. Bureau of Labor Statistics
-6%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Seasonally Adjusted
U.S. and Syracuse Area Unemployment Rate
10%
9%
United
States
Consistent with other
upstate metro areas,
Syracuse’s jobless rate
remains well below
the U.S. average
9.9%
8%
8.0%
(Mar)
7%
Syracuse
6%
5%
Sources: U.S. Bureau of Labor Statistics,
New York State Department of Labor
Note: Syracuse data seasonally adjusted by M&T
4%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A
2007
2008
2009
‘10
Year-Over-Year Absolute Change
Syracuse Area Job Gain/Loss – Q1 2010
Percentage
Change
Private Education
Health Care Services
Leisure & Hospitality
Transportation &
wholesale trade layoffs
account for 37% of
2010 job losses, even
though they make up
just 7% of total
employment
Construction
700
600
400
Retail
-600
Transportation
-800
-900
Wholesale Trade
-1,000
Financial Activities
Manufacturing
800
-1,800
Source: U.S. Bureau of Labor Statistics
4.0%
1.7%
2.2%
3.5%
-1.9%
-8.8%
-5.9%
-5.8%
-6.1%
Percentage of Average Private Sector Jobs*
Health Care & Private Education Employment
Syracuse Metro Area vs. United States
Similar to Rochester
23%
22%
Evolving labor market
insulates Syracuse economy
22.8%
21%
20%
Syracuse
19%
17.9%
18%
United
States
17%
16%
15%
Source: U.S. Bureau of Labor Statistics
* 12-month moving average
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Year-Over-Year Percentage Change
Construction Employment
Syracuse Metro Area vs. United States
Another Positive…
Building activity continues
to support local economy
6%
4%
4.8%
2%
0%
Syracuse
-2%
-4%
-6%
-8%
-10%
United States
-12%
-11.3%
-14%
-16%
Source: U.S. Bureau of Labor Statistics
-18%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Year-Over-Year Percentage Change
Wholesale Trade & Transportation Job Growth
Syracuse Metro Area vs. United States
…But Also a Negative
Local job losses remain
well above the U.S. average
2%
1%
0%
Syracuse
-1%
-2%
-2.7%
-3%
-4%
United States
-5%
-6%
-7%
-7.4%
Source: U.S. Bureau of Labor Statistics
-8%
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
Consumer Confidence Index
Syracuse Metro Area vs. United States
Slowly Getting Back
On Our Feet…
United States
100
Consumer sentiment is
improving — but will remain
fragile until the jobless rate
begins to shrink
90
82.2
80
73.9
70
60
63.6
Syracuse
54.8
50
Sources: Sienna Research Institute, University of Michigan
40
Q1
Q2 Q3
Q4
2007
Q1 Q2
Q3 Q4
Q1
2008
Q2 Q3
Q4
Q1 Q2
2009
Q3 Q4
Q1
‘10
Percentage of Average Private Sector Jobs*
State and Local Government Employment
Syracuse Metro Area vs. United States
Potential Storm Cloud
21%
Will NYS budget woes hurt
state & local employment levels?
21.1%
20%
Syracuse
19%
18.3%
18%
United
States
17%
16%
Source: U.S. Bureau of Labor Statistics
* 12-month moving average
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M
2007
2008
2009
‘10
2010-11 Economic Outlook
Economic Cycle Research Institute
U.S. Leading Economic Index
Indicates a turning point in the economic cycle when changes in the direction
of the index are persistent, pronounced, and pervasive over several months.
Designed to turn down before a recession and turn up before an expansion.
Index
1992 = 100
6-9 Month Outlook
145
Further growth appears
to be on the horizon…
140
135
130
125
120
134.7
Index Components
Money supply (M2)
Weatherrelated
dip
Commodity prices
Mortgage purchase applications
115
110
Corporate bond quality spread
NYSE Composite Index
Ten-year Treasury yield
105
100
Initial jobless claims
2007
2008
2009
‘10
Apr 30
Institute For Supply Management
U.S. Manufacturing Activity Index
Index Numbers Greater Than 50 = Expansion
…led by a rebound in manufacturing,
where activity expanded for the 9th
consecutive month in April
60
55
60.4
50
45
40
35
30
"Manufacturers continue to see
extraordinary strength in new orders,
as the New Orders Index has averaged
61.6 percent for the past 10 months.”
“…signs for employment in the sector
continue to improve as the Employment
Index registered its fifth consecutive
month of growth.”
“…Overall, the recovery in manufacturing
continues quite strong, and the signs are
positive for continued growth."
Norbert Ore—ISM Business Survey Committee chairman
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A
2007
2008
2009
2010
Inflation-Adjusted Percentage Change From Previous Quarter at Annualized Rate
Fixed Investment in Equipment &
Software by U.S. Businesses
19.0%
13.4%
20%
10.0%
10%
6.5%
2.2%
0%
10.0%
4.5%
1.5%
-0.5%
-0.5%
-4.9%
-5.0%
-10%
-9.4%
-20%
-25.9%
-30%
-36.4%
-40%
Sources: U.S. Bureau of Economic Analysis
M&T Bank forecast
-50%
8.0%
Business Spending
Takes the Lead
Capex is rebounding as
firms move forward with
necessary investments
that were postponed
over past several years
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2007
2008
2009
2010
FORECAST
U.S. Household Debt Service Ratio
As a Percent of Disposable Income
Sobering Reality
Q1 2008
13.92%
Consumers will continue to repair
battered balance sheets by saving &
paying down debt for at least another
year, keeping a lid on economic growth
14%
13%
Average
Since 1980
12.60%
12.07%
12%
11%
Source: Federal Reserve
10%
80
82 84 86 88
90 92
94 96
98 00
02
04 06 08 09
Q4
Inflation-Adjusted Year-Over-Year Percentage Change
U.S. Personal Income Ex. Transfer Payments
Income Drag Persists
8%
7%
6%
5%
4%
3%
R
E
C
E
S
S
I
O
N
2.3% average
since Jan 1990
2%
1%
0%
R
E
C
E
S
S
I
O
N
Ex. government payments,
real income remained below
year-ago levels for the 26th
consecutive month
R
E
C
E
S
S
I
O
N
-0.6%
-1%
-2%
-3%
-4%
-5%
-6%
Source: U.S. Bureau of Economic Analysis
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Mar
Months’ Supply of Available Homes
U.S. Single Family Homes For Sale
Existing Homes
New Homes
Months Supply
At Current
Sales Rate
12
Jan:09
R
E
C
E
S
S
I
O
N
11
10
9
8
12.4
Housing Drag
The housing market
will face significant
pressure for at
least another year
as inventory levels
remain well above
historic norms
7
R
E
C
E
S
S
I
O
N
6
5
8.0
6.7
4
Sources: U.S. Census Bureau, NAR
3
00
01
02
03
04
05
06
07
08
09 10
Mar
Seasonally Adjusted
U.S. Unemployment Rate Forecast
Labor Drag
11%
The jobless rate
will remain
elevated for an
extended period
10%
10.0%
9.5%
9%
8.9%
8%
FORECAST
7%
6%
5%
Sources: U.S. Bureau of Labor Statistics, M&T estimates
4%
Q1
Q2
Q3
2008
Q4
Q1
Q2
Q3
2009
Q4
Q1
Q2
Q3
2010
Q4
Q1
Q2
Q3
2011
Q4
Seasonally Adjusted at Annual Rate
U.S. Real Gross Domestic Product
Trillions
of Constant
Q1:10 Dollars
$15.4
Linked Qtr Annualized
Percent Change
2010 Q1
3.2%
Q2
2.9%
Q3
3.0%
Q4
3.1%
2011 Q1
3.1%
Q2
2.9%
Q3
3.1%
Q4
3.2%
$15.2
$15.0
$14.8
Modest Recovery
The economy should expand
by 3.0% in 2010 and by 3.1%
in 2011—positive, but below
historic norms
$15.4
$14.9
$14.8
F
O
R
E
C
A
S
T
$14.6
$14.4
$14.3
$14.2
Sources: U.S. Bureau of Economic Analysis, M&T estimates
$14.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2006
2007
2008
2009
2010
2011
Federal Government Expenditures
As a Percent of GDP
26%
26%
25%
25%
24%
24%
23%
23%
22%
22%
21%
21%
25.4%
Year-Over-Year
Spending Increase
2006
2007
2008
7.4%
2.8%
9.3%
2009 17.9%
2010
5.8%
2011
3.0%
Uncle Sam
Lends a Hand
Fiscal policy helps
support 2010-11 growth—
but what comes next?
20%
20%
19%
19%
18%
18%
25.1%
C
B
O
F
O
R
E
C
A
S
T
Source: Congressional Budget Office
17%
17%
Surplus/
Deficit as
% of GDP
98 99 00 01 02 03 04 05 06 07 08 09 10 11
0.8% 1.4% 2.5% 1.3% (1.5%) (3.4%) (3.5%) (2.6%) (1.9%) (1.2%) (3.2%) (9.9%) (10.6%) (8.3%)
Year-Over-Year Percentage Change
U.S. Pre-Tax Corporate Profit Forecast
Over Next 12 Months
17%
A Critical Handoff
16%
Business profits will have to
continue rising to offset the
stimulus wind down
15%
14%
13%
12%
11%
10%
9%
8%
7%
6%
5%
4%
J
F
M
A
M
J
J
2009
A
S
O
N
D
J
F
2010
M
Real GDP Growth Forecast by Region
2009
2010
2011
United States
-2.4%
3.1%
2.6%
Canada
-2.6%
3.1%
3.2%
Mexico
-6.5%
4.2%
4.5%
Euro Zone
-4.1%
1.0%
1.5%
China
8.7%
10.0%
9.9%
India
5.7%
8.8%
8.4%
World
-0.6%
4.2%
4.3%
Source: International Monetary Fund,
April 2010
2010-11 Interest Rate Forecast
2009
2010
2011
Q4
Q1
Q2
Q3
Q4
Q1
Fed Funds
0.12
0.1
0.2
0.3
0.4
0.5
3-Month LIBOR
0.27
0.3
0.4
0.5
0.7
0.9
1-Year Treasury
0.35
0.4
0.4
0.5
0.9
1.0
10-Year Treasury
3.46
3.7
3.7
3.5
3.6
3.8
30-Year Mortgage
4.92
5.0
5.0
4.9
5.1
5.3
Inflation – CPI
3.4
1.5
1.9
1.9
2.0
2.0
Questions?
[email protected]
Western NY* Private Sector Employment
Manufacturing (L)
Manufacturing
Jobs (000s)
Non-Manufacturing (R)
Job Growth Hokie Pokie
Non-Manufacturing
Jobs (000s)
Factory job losses offset
gains in non-manufacturing
employment
240
1,000
990
220
980
200
* Buffalo, Rochester &
Net Gain in
Non-Manufact. Jobs:
Syracuse metro areas
59,000 (+6.4%)
180
140
960
950
Net Loss in
Manufacturing Jobs:
98,400 (-41.0%)
160
970
940
930
Source: U.S. Bureau of Labor Statistics
Data are 12-month moving averages
120
920
99
00 01
02 03 04 05
06 07
08 09
Relative Decrease in Manufacturing
Employment Since January 1999
Western New York vs. United States
Western NY factory employment has declined at a 4.7% annual rate
since 1999—modestly faster than the 3.5% nation average decrease
0%
-5%
Western NY*
-10%
-15%
R
E
C
E
S
S
I
O
N
-20%
-25%
-30%
-35%
-40%
-45%
Data are 12-month
moving averages
99
00
R
E
C
E
S
S
I
O
N
United
States
-32.7%
* Buffalo, Rochester &
Syracuse metro areas
-41.0%
Source: U.S. Bureau of Labor Statistics
01 02
03
04
05
06
07
08
09
Manufacturing Share of Private Employment
Western & Downstate New York vs. United States
22%
* Buffalo, Rochester &
Syracuse metro areas
20%
18%
Despite the long-term
decline in factory jobs, the
WNY region still relies on
manufacturing to a greater
extent than the U.S. overall
16%
14%
12.7%
10.9%
12%
Western NY*
10%
United
States
8%
6%
4%
2%
Downstate NY
4.0%
Source: U.S. Bureau of Labor Statistics
99
00
01
02
03
04
05
06
07
08
09
Western New York vs. United States
Increase in Private Non-Manufacturing Jobs
Since January 2002
Western NY*
8%
Increase
In Average
Number
Of Jobs
From Total
At Start of
2002
6%
United States
Tortoise vs. Hare…
Job growth outside the
factory sector has been
less volatile than for
the U.S. overall
4%
* Buffalo, Rochester &
2%
2.2%
1.8%
Syracuse metro areas
0%
-2%
2002 2003
2004 2005
2006
2007 2008 2009 ‘10
Mar
Western New York vs. United States
Increase in Professional & Business Services Jobs
Since January 2002
Western NY*
United States
14%
12%
Increase 10%
In Average
Number
8%
Of Jobs
From Total
At Start of
6%
2002
4%
Opportunity #1
WNY has topped the
U.S. growth rate over
the past 6 years—can
we continue to build
on this progress?
8.4%
Net Gain:
* Buffalo, Rochester &
Syracuse metro areas
2%
12,700 jobs
0.5%
0%
-2%
-4%
Source: U.S. Bureau of Labor Statistics
2002 2003
2004
2005 2006
2007 2008
2009 ‘10
Mar
Western New York vs. United States
Increase in Private Education Employment
Since January 2002
Opportunity #2:
28%
Increase
In Average 24%
Number
Of Jobs
From Total 20%
At Start of
2002
16%
Job creation at WNY colleges
& universities has also topped
the U.S. norm—how can we
leverage this advantage?
Western NY
United States
25.8%
22.8%
* Buffalo, Rochester &
Syracuse metro areas
12%
Net Gain:
14,500 jobs
8%
4%
Source: U.S. Bureau of Labor Statistics
0%
2002 2003
2004 2005
2006
2007 2008
2009 ‘10
Mar
Western New York vs. United States
Increase in Private Health Care Services Jobs
Since January 2002
Opportunity / Challenge:
24%
Increase
In Average
Number
Of Jobs
From Total
At Start of
2002
22%
20%
While health care has been a steady
source of job creation, WNY has not
kept pace with the national norm—
can we ramp up growth with further
investment in our medical sector?
22.7%
18%
16%
14%
12%
10%
8%
Western NY
United States
11.7%
* Buffalo, Rochester &
Syracuse metro areas
Net Gain:
6%
4%
Note: includes social services
Source: U.S. Bureau of Labor Statistics
2%
0%
2002 2003
2004 2005
2006
19,700 jobs
2007 2008
2009 ‘10
Mar